Half of the 200 insurers surveyed have budgeted core systems initiatives for the next 12 to 18 months, according to “US Insurance Market Core Systems Research,” a survey by Insurance Global Operations, an insurance software company.
“As satisfaction levels with legacy systems continue to decline and the industry confidence continues to grow relative to new and modern core processing systems, we expect to see an accelerated shift from the old to the new,” IGO said in the report. “P&C and Group Life carriers share similar satisfaction levels, challenges, and initiatives despite the differing lines of business, functionality, and processing needs.”
Of those surveyed, more than 42 percent graded their current core systems as “C” or lower; 48 percent graded the current system as a “B” and 10 percent as “A,” Insurance Global Operations (IGO) said.
Most insurers have multiple policy and claims administration systems in place, IGO said; 42 percent had two to five systems, 14 percent have six to 10, 9 percent have 11 to 25 and 4 percent have more than 25 policy and claims administration systems. Thirty-one percent have a single system.
Homegrown systems were reported at 75 percent of group life carriers; 55 percent of P&C carriers have homegrown systems in production. In descending order, the greatest challenges they face include: aging legacy systems, integration, maintenance costs, scalability/flexibility, none, outdated back office systems and regulatory/compliance issues.
The survey was based on phone conversation with 123 P&C and 77 group life carriers.
